Unlocking circular economy potential of African SMEs

In a bid to explore the potential and cost benefits of adopting circular business models and principles in Africa, a recent pilot project in South Africa has demonstrated the transformative power of circularity for small and medium enterprises (SMEs). Catherine Wijnberg, the CEO of Fetola, discussed the success of a circular economy accelerator program that took 46 small businesses through a journey of embracing circularity principles. The data from the project revealed a significant and data-driven change in the profitability, job creation, and positive environmental impact of these businesses. Wijnberg emphasized the importance of integrating circular practices into businesses, highlighting that sustainability is not just a luxury for well-established Western companies but a driver of profitability and environmental consciousness for all businesses. The accelerator program involved businesses from 11 different sectors, demonstrating that with simple training in circularity, these SMEs were able to transition from linear practices to circular innovations. This shift not only boosted profits but also contributed positively to the planet. One key aspect highlighted in the discussion was the interdependence of policy, business landscape, and consumer behavior in enabling circular practices. While an ideal scenario involves conducive policies and collaborative circular ecosystems, Wijnberg pointed out that implementing circular practices at the business level can lead to immediate improvements in profitability, job creation, and environmental sustainability, independent of a supportive external environment. Financial support for SMEs looking to transition to circular models was also a significant topic of discussion. Wijnberg acknowledged the challenge SMEs face in accessing growth finance, particularly in the green business sector where risks are perceived to be higher. She highlighted the Nedbank Green Grant Finance Fund as one initiative aimed at helping SMEs become investment-ready, bridging the gap between available funds and businesses seeking investment. In addressing the concerns of investors interested in supporting SMEs in Africa, Wijnberg emphasized Fetola's expertise in de-risking investments and providing assurance to funders through a qualified pipeline of businesses. By vouching for the credibility and potential of these SMEs, Fetola aims to protect the interests of investors while facilitating financial support for sustainable and circular businesses. The conversation with Catherine Wijnberg shed light on the untapped potential of African SMEs to drive sustainable growth through circular practices. By empowering SMEs with the knowledge and tools to adopt circularity, Fetola is paving the way for a more profitable, job-creating, and environmentally conscious business landscape in Africa.